Don't Solve the Wrong Problems Precisely!

All of the serious errors in management can be traced to one fundamental flaw—solving the wrong problem precisely. Indeed, solving the wrong problem precisely is so important that it has its own special name, The Error of the Third Kind (E3).

The vast majority of books on management contribute to E3 because they imply that managers already know what their important problems are, for example: how to downsize in the most efficient way, how to improve chances for success in the global economy, how to install the correct Total Quality Management program, how to design the right reward system and so on. In each case, the unstated assumptions are that the essential problem the organization is facing is downsizing, global competitiveness or whatever it may be. While the assumptions may be correct, they are so crucial to formulating a problem correctly that they deserve to be challenged in the strongest possible way by asking tough questions.

The ability to solve the right problems involves asking the most basic questions facing all organizations.

What businesses are we in?

What businesses should we be in?

What is our mission?

What should our mission be?

Who are our prime customers?

Who should our customers be?

How should we react to a major crisis, especially if we are, or are perceived to be, at fault?

How will the outside world perceive our actions?

Will others perceive the situation as we do?

Are our products and services ethical?

E3 issues an important challenge to all problem solvers: Why get an exact solution to the wrong problem when an approximate solution to the right problem may not only suffice, but be better? Indeed, far better an approximate solution to the right problem than an exact solution to the wrong problem! There are countless examples of E3 errors in the business world. Let’s consider two.

Option Trikaya Gray is a Bombay-based advertising agency that hit upon the idea of using Adolf Hitler as a big name to promote a new fast food product, Dosa King Snack ‘n Rolls, a South Indian delicacy. "Yo! Dosa King," a snarling cartoon Hitler exclaims in colorful ads prepared for Indian magazines and a slick newspaper supplement in which he shares space with Abraham Lincoln, Count Dracula and other famous figures gripping rolled dosas.

"Basically, this product is being positioned as a 'fun' product," account supervisor Nitin Tandon of Option Trikaya Gray said. "These are people you wouldn’t normally imagine having a dosa. They add fun to the product."

In this situation, the problem was formulated as a "marketing, promotional or attention-grabbing challenge." The advertising agency clearly failed to consider other possible formulations or challenge its own ideas. To defend the use of Hitler’s name as a "clever promotional idea," the agency had to make the dubious and implicit assumption that the "celebrity" of Hitler could be decoupled from his evil acts. By failing to challenge its own assumptions, Option Trikaya Gray became a party to the history of evil. The point: Always ask whether your strategy is not merely efficient, but ethical as well.

Consider another example: A few years ago a house was listed for sale in the real estate section of the Hollywood Reporter, a trade paper devoted to the LA entertainment industry. The seller’s last name was Schindler. The real estate agent handling the sale thought it would be "cute" to advertise it as "Schindler’s Listing" in order to draw attention to it. It was an obvious takeoff on the movie Schindler’s List, which chronicled the heroic efforts of Oscar Schindler, who saved as many Jews as he could from the Holocaust.

The ad certainly drew attention. The real estate firm received complaints for its tastelessness from the head of nearly every major Hollywood studio.

As is so often the case, an initial dubious action—the ad itself—gave rise to a chain of dubious arguments and further dubious actions. In defending the ad, and in attempting to deflect attention away from its tastelessness, the realtor asked, "Would there have been any flap at all if the seller’s last name had been, say, "Piano," as in [the motion picture] The Piano?" Of course there wouldn’t. That’s the whole point! Merely raising the question is proof of the muddled thinking of the realtor.

In this situation, the first part of the problem was formulated correctly as attracting as much attention as possible to a property in the highly competitive real estate market of Southern California. The second part, however, was formulated incorrectly as the search for and use of almost any means to accomplish the end result. It was the failure to appreciate the inappropriateness of the means that makes the case of Shindler’s Listing a classic example of solving the wrong problem precisely. In the process of attracting maximum attention in the shortest time possible, the realtor succeeded in offending and angering the largest potential pool of buyers, or in other words, the largest pool of stakeholders.

The case of Schindler’s Listing is also important because it reveals one of the major patterns associated with many dubious arguments. First, a half-baked, half-thought-out idea is concocted. In the case of the real estate agency, this is the notion that it would be "cute" to list the property as Schindler’s Listing. Second, little or no thought is given to the fact that others may not see the idea in the same way. The initial idea then prompts a foolish action, in this case, the actual presence of the ad.

In both cases, the proponents are shocked to find they have caused a moral uproar in the community. An argument is then advanced to justify the initial action, prompting the further deepening of the mess. Lastly, the proponents then act as though they were the real victims of the entire affair. Rarely does it occur to them that the only way to break the cycle is to frankly admit that their initial ideas or actions were dumb. Unless this is done, stupidity grows exponentially, and as a result, the problems are compounded. Each solution only makes the issue grow and become worse.

This article is excerpted from Ian I. Mitroff, Smart Thinking for Crazy Times: The Art of Solving the Right Problems, Berrett-Koehler Publishers, Inc., San Francisco, 1998.

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